Assessment of the Degree of Economic Development of Rural Areas

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At the meeting of the National Projects and Demographic Policy Council the President of the Russian Federation emphasized that “Rural areas have a robust economic, demographic, natural, historical and cultural potential. Our goal is to use it effectively for the advantage of the whole country, in order to achieve a fresh quality of life for countless our citizens.”

Currently, the decision of problems of the development of rural areas of the Russian Federation is carried out in the framework of the idea of long-term socio-economic development, the foodstuff security doctrine and the federal program “Sustainable development of rural areas.”

The potency of the development of territories is characterized by comparing the effect obtained with the value of the resources or costs used. Determination of the effectiveness of the development of territories is based on a contrast of its results with the cost of labour and with the value of productive resources. Development is connected with the idea of economic potential. Economics of Development 7e

The phrase “potential” means possibilities, sources, tools, supplies, which can be actuated and useful for achievement of certain goals. Availability of property potential due to the economic stability and environmental conditions is understood as an economic potential. The economic interpretation of “potential” regards it as the capability of the economic entity to make certain its long-term performance and achievement of strategic goals utilising the system of available resources.

In this regard, we propose methodology for evaluation of the economic potential of rural areas, allowing taking into account the results of the sustainable management of certain areas. We believe that the economic potential of rural areas is visible as the qualitative characteristics and quantitative measurement parameter. To do this it is necessary to define a set of indicators, the composition that depends on the purposes of evaluation and needs of the assessment subject. Since it is difficult to give the priority to any specific criteria, we propose to carry out a comprehensive assessment of the economic potential of rural areas, allowing calculating the integral index, which characterizes the municipality and the region as a whole.

The methodology includes an analysis of the economic potential of areas as a score and as a score construction regarding the influence of the areas development factors. A significant advantage is that the evaluation could be performed on the basis of the official statistics.

Analysis of the literature revealed that currently there are numerous types of rating, however, within our opinion, these methodologies differ in the first pair of indicators, algorithm for calculating comparable indicators and rating construction. In this connection, it was chose to take into consideration the prior experience, improve and generalize existing strengths and develop this methodology.

Methodology of the evaluation of the economic potential of rural areas includes the following stages: justification of the parameters and indicators system characterizing the given parameter; calculation of comparable indicators; calculation of parameters with various methods (additive convolution method; the technique of calculating the exact distance from the benchmark); rating construction; analysis of the results obtained, the seek out reserves of increase of the economic potential use efficiency. The qualitative characteristic of the economic potential of the area could be the extent of its sustainable development. Comparative evaluation afford them the ability to take into consideration all the important parameters of economic development which are essential.

We identified the following elements in the structure of the economic potential: production potential, employment potential, financial potential, investment potential and consumption potential. Inside our opinion, this structure will allow to evaluate the economic potential of rural areas objectively. Since rural areas are areas, which main activity could be the production of agricultural products, the structure of the production potential of the territories includes indicators of the agricultural sector development. At once, the agricultural production has the necessity for manpower, financial, investment and other resources which currently are now being used or may be used in the industry.

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